Nasdaq EPS hit record amid NYSE takeover battle
2011-04-20 17:52:50
Nasdaq OMX Group, the exchange operator battling to buy out crosstown rival NYSE, showed few signs that it was distracted from its core business as it logged record profit on the back of robust derivatives trading.
Excluding one-time item, the company's per-share profit was a record 61 cent per share, matching the average analyst estimate as compiled by Thomson Reuters IBES.
Nasdaq this month joined with IntercontinentalExchange (ICE) to bid for Big Board parent NYSE Euronext, which earlier this year agreed to be acquired by Germany's Deutsche Boerse AG.
Though NYSE's board rejected the higher offer from Nasdaq and ICE, the pair sweetened the bid on Tuesday with a promise to pay NYSE Euronext $350 million if regulators block their takeover plan -- a move meant to ease the board's antitrust worries, and to draw them to the negotiating table.
"The takeover battle didn't appear to impact them whatsoever, they had a record quarter. Almost all revenue lines increased, and they continue to see pretty big jumps in their data centres," said Richard Repetto, analyst at Sandler O'Neil.
Revenue rose 15% to $415 million, better than the $409 million expected by analysts. Costs rose 12%from last year, offset by a 26% rise in trading-based revenue at the U.S.-based, trans-Atlantic company.
While the parent of the Nasdaq Stock Market hit a market share nadir of 19% in all U.S. stock-trading, it logged a 31% rise in derivatives trading, helped by the market reaction to unrest in North Africa and Japan's earthquake and tsunami.
When Nasdaq chief executive Robert Greifeld unveiled the takeover plan on April 1, he said record earnings in the first quarter in part made the move possible. It was the second straight record in terms of earnings per share, helped by recent share repurchases.
"The discipline we have shown in managing our business is allowing us to pursue game-changing opportunities in our industry," the CEO said in a statement after quarterly results were released on Wednesday.
Including all items, Nasdaq earned $104 million, or 57 cent per share in the first quarter, up 70% from $61 million, or 28 cent a share, a year ago. Nasdaq's share were flat before the open of markets.